Surprise, Surprise: SEC Conducting Unannounced Exams

The Boston Regional Office of the SEC has recently conducted roughly 20 unannounced visits to registered investment advisers in the region. This fact, confirmed during the recent meeting of the New England Broker-Dealer and Investment Adviser Association (NEBDIAA), is in keeping with the SEC’s renewed focus on a more robust examination program.

While onsite, the SEC has spoken with chief compliance officers and occasionally made document requests. Kevin Kelcourse, associate director for the SEC Boston Regional Office, has already recently confirmed that these surprise examinations are intended to catch advisers off-guard and prevent them from remedying potential violations before the SEC arrives.

During the recent NEBDIAA meeting, custody was noted as one of the focus areas of the surprise exams. There also appeared to be an early trend of examiners focusing on private equity firms as well as never-before-examined advisers.

At the moment, it is unclear whether other regional offices will follow Boston’s lead. It is important to be prepared for such an exam, though. Some steps that can be taken to ensure preparedness include:

  • Preparing a PowerPoint intended to welcome the SEC and showcase the adviser’s commitment to compliance;
  • Conducting a self-mock audit and identifying and locating necessary documents; and
  • Prepping employees for SEC interaction.

We will continue to keep you updated as new information becomes available.


Subscribe to CSS Blog

CSS frequently publishes blog posts which are written by our team from their observations in the field, at conferences and through experiences with compliance professionals. These posts are designed to further knowledge and share industry best practices. Topics run the gamut, including Form ADV, cybersecurity, MiFID II, position limit monitoring, technology challenges and more. Complete and submit the brief form below to receive notifications when we publish new content.

Loading form...

Latest Content

Envestnet Partners with CSS to Help Advisors Meet Form CRS Filing Requirements

CHICAGO, March 24, 2020 — Envestnet, Inc. (NYSE: ENV) has entered into a strategic partnership with Compliance Solutions Strategies (CSS) to offer a comprehensive, fully customizable Form CRS software solution for registered investment advisers (RIAs) and broker-dealers to Envestnet clients. CSS’s Form CRS Automator software is designed to help firms meet the Form CRS filing requirements adopted by the … Continued

OCIE Now Conducting Exams Off-Site Unless Necessary

On March 23, 2020, the SEC’s Office of Compliance Inspections and Examinations posted an announcement on its website that “in light of health and safety concerns and other circumstances, OCIE has moved to conducting examinations off-site through correspondence, unless it is absolutely necessary to be on-site.” Similarly, over recent weeks, CSS has arranged with clients … Continued